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Brokers have given their verdict on the big four’s commission structures while also calling on all lenders to share more of their growing profits.
According to a recent poll on The Adviser, 60 per cent of respondents think ANZ is the major with the fairest commission structure.
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NAB, which recently reintroduced first-year trail, claimed 30 per cent of the vote, while Commonwealth Bank and Westpac each received 5 per cent.
Commonwealth Bank’s general manager of broker sales, Sam Boer, confirmed that the bank is working on a new commission structure that will provide more flexibility for brokers.
“The new structure, to be rolled out later this year, will allow brokers to choose what is best for their business,” he told The Adviser.
“For example, new brokers may prefer a higher upfront payment compared to more established brokers who may prefer higher trail payments.”
NAB and Westpac declined to comment. ANZ also declined to comment, although the bank’s head of third-party relationships, Keiran Evans, told brokers in a recent email that ANZ has been “unwavering” in paying first-year trail.
“We have been supporting the broker industry since the early days in all aspects,” he said.
Meanwhile, brokers have said that lenders need to change their commission structures to reflect the increase in broker workloads and bank profits since the GFC.
Glenavon Finance owner David Young said a fairer commission structure would involve uniform payment of first-year trail and the removal of clawbacks.
He added that this would not be unfair on the lenders because they had enjoyed improved funding costs since cutting commissions during the GFC.
In Mortgage & Finance Services director Helen Lenyszyn said brokers were entitled to a more generous commission structure because they were now doing more work on behalf of banks.
“The way I look at it, we see the client from day one and so we should be earning commission from day one,” she said.
“I also think we deserve a higher trail because of the ongoing commitments we have with the client.”
Ray Hampson from Ray Hampson Finance said upfront and trailing commissions should be left untouched, but that clawbacks should be limited to 12 months and 50 per cent.
“Clawback is a bugbear. You do all that work, suddenly there’s a divorce – I’ve got one right at the moment where I’ve had to give all the money back,” he said.
[Related: Commission increase spurs industry debtate]
